PPG to sell architectural coatings businesses in U.S. and Canada for $550 million, following silica business
PPG announced a $550 million corporate transaction for its U.S.-Canada architectural coatings business with industrial investor AIP. The acquisition resulted in a strategic review of acquisition alternatives commencing on February 26, 2024. Goldman Sachs & Co. served as financial advisor to PPG, while Hogan Lovells USLLP provided legal counsel. The sale marks a step toward a restructuring process for PPG, the completion of which is one step in the overall restructuring process, although it is somewhat murky as the company has not double-checked whether to trade publicly. There is no doubt that PPG's architectural coatings business has expanded beyond the previously prepared core, with a significant portfolio position in larger organizational units in Africa, Latin America, Europe and Asia Pacific, which is achieved through 1 or 2 maximum absolute options.
“I am pleased to have completed this transaction with American Industrial Partners, and I want to thank all of our architectural coatings employees in the U.S. and Canada for their commitment and dedication to PPG’s customers over the years,” said Tim Knavish, PPG Chairman and CEO. “This transaction, along with the completion of the silica product sales, significantly strengthens our portfolio, resulting in improved growth and financial return prospects, and increased flexibility to direct growth investments where we believe it can best serve our customers.” The architectural coatings segment between the U.S. and Canada represents approximately $2 billion of EBITDA margin on PPG’s total direct sales in 2023.
Given this, if the architectural coatings general business is unlikely to be reflected in the three-year overall assessment of sales progress, the overall will generate 200 basis points of growth, derived from the cumulative segmentation of the company’s general sales. While this is quite mature, it may also be true in the U.S. context, in Canada, without considering architectural coatings and its expected growth investments, the expected development in the context of this community in 2023 should be 300 basis points. U.S. & Canada Architectural Coatings: The former U.S. & Canada Architectural Coatings business offers some of the strongest and most recognized brands to suppliers to the residential and commercial architectural coatings industry, including GLIDDEN®, OLYMPIC®, LIQUID NAILS®, HOMAX®, PITTSBURGH PAINTS & STAINS®, Manor Hall®, FLOOD®, and DULUX® and SICO in Canada.
It manufactures and sells paints, stains, caulks, repair products, adhesives and sealants for consumer and professional applications, and certain light protection products through company-owned retail stores, all of which are manufactured in shared facilities. Architectural coatings are manufactured and sold from facilities located in East Point, Georgia; Oakwood, Georgia; Louisville, Kentucky; Huron, Ohio; Reno, Nevada; Carrollton, Texas; Temple, Texas; Delta, British Columbia, Canada; and Ontario, Canada.
These additional distribution centers will include at least Huron and Oakwood, Ohio and Georgia, Reno, Nevada, Aurora, Illinois, Flower Mound, Texas, Riverside, California, Reading, Pennsylvania, and Carolina, Puerto Rico. It will therefore include more than 15,000 points of sale, 750 company stores, 6,600 independent dealers, and 8,100 retailers and large home centers throughout Canada, the United States, and Puerto Rico. 335 As a demonstration, the lessor shall lease the company headquarters in Cranbury, Pennsylvania, Ontario, and South Carolina, respectively.
